Alexey Baranov: For Lean Production to become widespread in this country, we need a severe crisis

The 7th Lean Forum “Lean Production and Sustainable Development” was held on November 20-23 in Moscow, Russia. Alexey Baranov, Director of ORGPROM Group of Companies and Chairman of the “Lean Forum” National Public Movement Council made a presentation on the topic of “A Stable Foundation for Long Term Success in Unstable Times” and answered some questions of the Machine Building Portal.

In his presentation he made an emphasis on the long term difference between decisions leading to fast success and decisions working for stable results: "It is easy to get fast results using Lean Production. Reducing lead time and improving efficiency dozens of times within a few weeks – is a normal result of Kaizen events or short term lean production projects. But the results achieved tend to roll back sharply within a few days or weeks.”

Sustainable results are reproducible and effects can be rolled out independently from the provider, but some time is needed for that.

Russian managers are “suckers” for fast success and are not ready to wait, noted A.Baranov, citing the words of P.Pegorier, President of ALSTROM, Russia. In executing lean production projects, attention is focused mainly on the use of lean tools, but not on development of ideas or people. But to assure sustainable development of production systems, 20% of the efforts must be devoted to mastering tools and 80% to transformations in minds and perceptions of people. Greatest effects are achieved by companies who invest time and money into training and development of employees.

From the view point of sustainable development, it is important to understand that the customer is not the only stake holder, other stake holders are the society, owners, suppliers. Although their interests may be conflicting, we have to take them into account. Sustainable development may be assured if we build ideology, based on mutual trust and respect, by talking to each other and balancing interests, involving all stake holders (personnel, suppliers, customers, etc.) into lean transformations.

A. Baranov further noted that managers and owners of companies “who have conscience and who want to be sure of good future for their grandchildren” will be focused on sustainable development and environment protection now.

For Lean Production to become widespread in this country, we need a severe crisis, answered A.Baranov. In Russia, “support” was high on the priority list (support in order not to “let go under”), but when companies realize that there will be no support, and you have to fend for yourself, they come running the next morning and start to implement new management methods.

Alexey Baranov answered several questions from the Machine Building Portal

Q: In your classification, companies may be divided as being in different stages of lean implementation:

just starting on the lean journey;

being on the level of developing production systems of their own;

following the sustained development path.

Can you give us percentages of companies in all these stages?

A: - We did not conduct any special studies on this topic. Statistics that are available in literature can hardly be relied on, as the authors did not show investigation methods they used. I can just say what I observe talking to customers.

Companies that come to us feature a higher degree of lean usage, of course. But 90% of Russian companies either do not know what lean production is or just heard something about it. 5-10% know it to some degree and are implementing it, but only 1% are doing something tangible. The rest are just paying lip service or are at the level that we can not acknowledge as some degree of lean. These may be doing something in a non-systemic way, like having 5S somewhere just a little, a little of something else elsewhere.

1% of companies are really into lean and close to the level of developing production systems of their own. I have a yardstick of my own to measure it: it a company has a system of reproducing improvements and changes in that direction are irreversible (that is even if the Director is changed) that means for me that this company is on the level of developing a production system of their own.

And from that 1% of such companies may be only 0,0001 are into sustained development. For the whole of Russia, I think there would be 20, maximum 50 companies who can state that they are working on sustained development.

Those who are doing it right, I think will be around 10.

Q: - Considering your answer to the previous question and the actual situation , don’t you think the topic of the 7th lean Forum “Lean Production and Sustainable Development” is premature?

A: When we were conducting our first Lean Forum, we had doubts whether it is too early. I am deeply convinced that if we fail to start on sustainable development now, we can be out of the process for ever. It is a matter of a few years or it will be too late. And we will have to take the blame for putting our grandchildren into this situation.

Q: - How do you evaluate the progress of lean implementation in Russian machine building companies?

A: - At the latest “Machine Building and Engineering in Russia and CIS Countries” Forum that took place in Moscow on November 13-5, 2012, I was happy to hear some colleagues speak of lean production and production system development with a great depth of understanding. On the whole, it is an issue of competitive environment in which the company exists. In the machine building industry, that share of companies implementing lean and developing production systems is much higher that in other industries. Here we speak not of 1%, but of 5-10%. It is considered backward or “not trendy” at least not to have a person responsible for this activity. The positive trend is definitely there and I am happy it is so in machine building.